OklahomaHB 2764Oklahoma 2026 Regular SessionHouseWALLET

Revenue and taxation; duties of the State Board of Equalization; certification of revenue amounts; income tax rate reduction; effective date.

Sponsored By: Trey Caldwell (Republican)

Signed by Governor

Senate Committee

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Bill Overview

Analyzed Economic Effects

5 provisions identified: 1 benefits, 1 costs, 3 mixed.

Corporate income tax set at 4%

For tax years starting after December 31, 2021, corporations pay 4% on Oklahoma taxable income. Certain foreign corporations pay 4% on Oklahoma‑source income instead of 30%. Payers must withhold 4% of covered payments to those foreign corporations, send it quarterly, file returns, and give annual statements; payers who fail are personally liable. Oklahoma does not add extra state tax on accumulated taxable income or undistributed personal holding company income.

More oil and gas windfalls to reserves

Each February, the State Board certifies five‑year averages for oil, natural gas, and corporate income tax revenue that would go to the General Revenue Fund. After the first deposit, the Board ignores amounts actually deposited to the Revenue Stabilization Fund when computing the averages and uses the totals available for apportionment. If next year’s oil or gas revenue is above its five‑year average, 100% of the extra money goes to the Revenue Stabilization Fund. If corporate receipts are above average, 25% of the extra goes to the Constitutional Reserve Fund (up to its cap) and 75% to the Revenue Stabilization Fund; any overflow from the 25% also goes to the stabilization fund. This builds savings and leaves less for routine spending in boom years.

8% tax and withholding for nonresidents

Beginning November 1, 2025, nonresident aliens owe Oklahoma income tax at 8% of their Oklahoma taxable income, instead of 30%. Anyone who pays covered amounts to a nonresident alien must withhold 8%, send it quarterly by the last day of the next month, file required returns, and give an annual statement. Payers who fail to withhold or send the money are personally liable.

Trusts and estates taxed as singles

Beginning November 1, 2025, trusts and estates compute Oklahoma income tax using the single‑filer rate schedule. They cannot deduct federal income tax paid. The act takes effect November 1, 2025. This can raise Oklahoma tax for some estates and trusts.

Lower brackets and automatic rate cuts

For 2024–2025, Oklahoma sets new income tax brackets with a top rate of 4.75% (singles pay 0.25% on the first $1,000, rising to 4.75% above $7,200). Joint filers and heads use parallel brackets with the same top rate. You cannot deduct federal income taxes in these years. Starting with tax year 2026, rates are 0%, 2.5%, 3.5%, and 4.5%, with a 0% bracket on the first $3,750 for singles and $7,500 for joint filers; no federal tax deduction is allowed. When the State Board of Equalization certifies that collections beat a set threshold, each rate drops 0.25 percentage points, starting January 1 after the Board’s February certification. The Board makes a preliminary check each December and a final one in February, and uses the same reporting method as in December 2024. A declared revenue failure before year end delays a scheduled cut. At the December 2026 meeting, cuts also require revenues for the first 5.5 months to be at least 95% of the Board’s February 2026 estimate and no revenue failure.

Sponsors & Cosponsors

Sponsor

Trey Caldwell
Republican • House

Cosponsors

Stacy Jo Adams
Republican • House
Chris Banning
Republican • House
Micheal Bergstrom
Republican • Senate
Brad Boles
Republican • House
David Bullard
Republican • Senate
CrosswhiteHader
Affiliation unavailable
Emily Gise
Republican • House
Chuck Hall
Republican • Senate
John Haste
Republican • Senate
Neil Hays
Republican • House
Derrick Hildebrant
Republican • House
Shane Jett
Republican • Senate
John Kane
Republican • House
Gerrid Kendrix
Republican • House
Mark Lepak
Republican • House
Cody Maynard
Republican • House
Julie McIntosh
Republican • Senate
Dana Prieto
Republican • Senate
Kendal Sacchieri
Republican • Senate
Max Wolfley
Republican • House
Gabe Woolley
Republican • House

Roll Call Votes

All Roll Calls

Yes: 97 • No: 42

Senate vote • 5/22/2025

THIRD READING

Yes: 0 • No: 11

House vote • 5/20/2025

Top_of_Page

Yes: 74 • No: 19

House vote • 5/19/2025

DO PASS

Yes: 23 • No: 5

Senate vote • 5/19/2025